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11 views10 pages

Project Presentation

Uploaded by

inagantiadithya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Random Motors Project

Submission
Name – Aditya Inaganti
Q-1a) Formulate the null hypotheses to check whether the new models are
performing as per the desired design specifications.

For Rocinante36: For Marengo32:

Mileage HO :=22 Mileage HO :=15

Top speed HO :=140 Top speed HO :=210


Q-1b) Formulate the alternate hypotheses to check whether the new models
are performing as per the desired design specifications.

For Rocinante36: For Marengo32:

Mileage H1 :≠22 Mileage H1 :≠15

Top speed H1 :≠140 Top speed H1 :≠210


Q-2) In order to comment on whether the design specifications are being
matched or not, perform relevant hypothesis tests and calculate the p-value for
each. What will you conclude? Assume you are performing the tests at 95%
confidence level.
For Rocinante36: Conclusion

p-value for mileage =0.0822 Mileage: reject the null hypothesis


p-value for top speed =0.4316 Top speed: failed to reject null
For Marengo32: hypothesis

Mileage: failed to reject null


p-value for mileage =0.1342 hypothesis.
p-value for top speed =0.3730
Top speed: failed to reject null
hypothesis.
Q-3) You have learnt about the possible errors that might result from the
hypothesis tests. What type of error is more expensive for Random motors
based on the hypothesis they are testing? Why? Assume that you need to
refund all your customers if your cars deviate from specifications.
The type of error which is more Reason:
expensive:
Because the mileage for Rocinante is
Type 2 error for Rocinante mileage not 22

Type 1 error for Rocinante topspeed Because topspeed of rocinante is 140

Type 1 error for Marengo mileage Because marengo mileage is 15


Type 1 error for Marengo topspeed
Beacause marengo topspeed is 210
Failed to reject the null hypothesis for
all except rocinante mileage
Q-4) Develop a regression equation for each model at 95 percent confidence
level. From the regression equation predict the sales of the two models.
Develop the regression equation for the Develop the regression equation for the
Rocinante models and Predict the number Marengo models and Predict the number of
of unit sales of Rocinante36 model? unit sales of Marengo32 model?

Regression coefficients Regression coefficients

Price: -0.795026441 Price: -0.186728172

Mileage:8.306331092 Mileage:0.041301187

Top speed:-0.018572564 Top speed:0.220801682

Equation:50.72+(0.79)*Price+8.30*Mileage Equation: -13.44+(0.18)*Price+0.22*Topspeed

Predicted Sales(in units):227790 Predicted Sales(in units):25380


Q-5) Based on sales prediction, what is the overall predicted profit for
Rocinante36 model and Marengo32 model ?

Overall predicted profit

Rocinante36 Model: 22790000000 rupees

Marengo32 Model: 20304000000 rupees


Q-6) As a CEO, you wish to invest only in the model which is predicted to be
more profitable. Which model among Rocinante36 and Marengo32 will you
invest in?

Which model you will invest in?

I would invest in the Rocinanate 36 model


Q-7) Now you must have derived the regression equation for both models, Rocinante and
Marengo. Now if you increase the price of Rocinante36 and Marengo32 by 1 lac rupees
each, which car will have a higher impact on the sales due to increase in price? Give proper
logic for your answer. You can consider that all other specifications such as mileage and top
speed remain the same for both models.

Which car is most affected by a price increase? Why?

By increasing the sales by one lakh rupees on both the models there is a huge
change in sales and profits for the both the models in a positive way. In the
both the models the marengo 32 would get lower sales compared to the
rocinanate 36 due to the unit of marengo 32 cars sold is less compared to the
rocinante 36.
Q-8) After developing the regression equation for both models (Rocinante and Marengo), if you
analyse the p values for coefficients in the regression results, you will notice that some of the
regression variables (top speed, mileage and price) are insignificant. Remove the insignificant
regression variables from your selection and rebuild the regression model using only significant
variables. Compare the Adjusted R square value for the new and old regression model. Do you
notice any change in Adjusted R square value? If yes, explain the reason for the change.

Is there a change on Adjusted R square Value? If so, Why?

Rocinante old new marengo old new


R square : 0.99576 0.99571 R square: 0.8630 0.8628

Adj r square:0.99535 0.99544 Adj r square:0.8478 0.8530

Yes there is a change in the adjusted r square value due to consideration of


only the significant values for the new regression analysis model.

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